Financial services group Shuaa Capital said on Monday it won't suffer a major financial setback as a result of Kuwait's Gulfinvest International defaulting on a Dh200 million ($54.47 million) loan.

Gulfinvest said on Sunday it has defaulted on a Dh200 million loan to Abu Dhabi Commercial Bank for which Shuaa was a guarantor.

It also said it was in talks with Shuaa to restructure the loan. 'Shuaa had entered into a guarantee in respect of this loan in 2007, and confirms that it will fulfil its obligations as they become due,' a spokesman for the group said in an emailed statement.

The company said it expects 'no further material impact or downside risks arising from legacy issues of the firm.'  Shuaa doesn't have any other guarantees on its books of the Gulfinvest type, the spokesman said.

The Dubai-based investment bank said it already made a provision for the loan guarantee in its 2009 results.

Shuaa is one of the region's largest investment banks but suffered heavy losses in 2009 as a result of the global financial crisis. It brought in a new chief executive, Sameer Al Ansari, who in his first six months focused on reducing the company's investment portfolio.

Shuaa's subsidiary Gulf Finance lends to small and medium-sized enterprises, but otherwise the Dubai-based company is not a lender. 'The business of lending and providing loan guarantees is not a core activity of Shuaa,' a company spokesman said.-Reuters